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By Our Representative
A recent high-profile report on the imposition of Goods and Services Tax (GST) on handmade products has complained that the Government of India (GoI) has not shown any consideration for 90 million agricultural households, "who necessarily are connected to the artisan sector and sometimes overlap in activities."Pointing out that the GoI has looked at GST landscape "from the point of view of formal status", the report wonders, "Will a basket maker sell his bamboo baskets made from raw material from the local forest to his neighbouring farmer with tax? Will a tribal terracotta tile maker in Madhya Pradesh make a roof for his neighbouring farmer who gives him grain and charge tax?"

Prepared by Jaya Jaitly of the Dastkari Haat Samiti and the National Association of Craftspeople, and Ritu Sethi of the Craft Revival Trust, known to be elite NGOs seeking to promote handicrafts across India for the last several decades, the report states, on the basis of a "rapid survey", that 82% of the craftspeople would be covered by GST, as their "annual income" would be more than Rs 20 lakh.
However, shockingly, to the question, "Do you know even if annual income under Rs 20 lakh you have to register if you are taking your products outside the state?", 76% said no. A major reason cited for this is, only 19% of them are able to understand "the procedure for GST in their craft."

When asked whether they knew about the fact that the tax is applicable for their craft, only 25% answered in the positive. When asked if they have understood procedure for GST in their craft, only 19% answer in the positive. On being asked whether they knew of the tax applicable on their craft, 25% answered in the positive.
To the query, "Do you know that even if selling price is more with new tax, you will get reverse input refund on tax paid for raw material?", only 11% said they knew. On being asked if they have a computer in their home or nearby, 60% said "Yes", and when asked "Are you dependent on an educated person, accountant or CA to help you with procedures required by GST?", 57% said "Yes".

The report states, "The points and queries raised in this representation show that there is vast confusion at every level of the crafts sector which has been unrepresented in the preparation of GST. Is has happened because there has been no preparatory meetings with experienced representatives working in the field in this sector."
Pointing out that "crafts and handlooms have been treated as formal industries and material rather than skill based", the report says, the GST virtually "makes the word ‘skill' meaningless", evn as using the word 'hand' callously, wiping the relationship between the two "out of existence."
"Crafts and Handlooms have not been coherently slotted and come under tax slabs ranging from 0%, 0.25%, 3%, 5%,12%,18% and 28%", the report states, adding, all it is "impossible to tackle".

In fact, the report underlines, "No sympathy or consideration has been given to the ecological aspects of natural fibres, natural dyes, organically produced cotton, ahimsa silk, recycling of waste materials, which are all historically, culturally and traditionally valued in India".
According to the report, " Customers benefit only at the cost of the Indian artisan as the competitive and comparative advantage of cheap mechanized imports and the Indian mechanized industry are completely to the disadvantage of artisans with hand skills who use little or no machine assistance in their work."
This predicament has taken shape because, says the report, "Till now the crafts sector has largely remained untaxed because of which products were cheaper and price competitive, e.g., handmade shoes, handloom fabric, handmade apparel etc. GST on these products is in the range of 5% to 28% making these products expensive and highly uncompetitive."